Hope Rises For Nigeria As Crude Revives To $60 Per Barrel

Hope may be rising for Nigeria as price of crude oil rose to $60 on Wednesday.

On 27th December 2018, oil price had dropped at the international market to $50 per barrel, showing $9 below the 2019 budget projection. The worrisome development had prompted book makers to predict a turbulent year for the economy largely dependent on oil.

Nigeria’s President Muhammadu Buhari had late last year warned Nigerians of a hard time ahead but yesterday’s revival in global price of crude may spark hope for the Nigerian economy.

Oil price was bench-marked at $51 per barrel in Nigeria’s 2019 and $9 up is good news.

According to reports, oil price rebound, yesterday reaching a significant level of $60 a barrel as the global regulator, the Organisation of Petroleum Exporting Countries (OPEC), continue to withdraw excess oil from the international market. Prices of Brent, West Texas Intermediate, WTI, and OPEC Basket of 14 crude stood at $60.00, $59.91 and $56.11 per barrel respectively.

With the latest development, it is certain that the 2019 budget may start on a good note as far as implementation is concerned. The significant rise in price of crude is as a result of the ability of OPEC to mobilise its members not to pump excess oil into the market already explosive.

Going by further studies, there may still be uncertainty in the global oil market and mono economies like Nigeria’s must brace up for eventualities in the months ahead as other variables may see to rise and or fall in price of crude.

OPEC’s Secretary General, Dr. Muhammad Barkindo speaking earlier in Angola said, “OPEC knew it had to act in the face of this potential calamity. Throughout 2016, extensive consultations were undertaken with our non-OPEC partners, aimed at building consensus about the strategic urgency of re-balancing the global oil market in a collective manner.”

He added that, “Twenty-four (now twenty–five) oil producing nations agreed at the first OPEC and non-OPEC Ministerial Meeting held on the 10th of December 2016 in Vienna, on a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.

“What would become clearer in time is that one of the greatest inherent strengths of the ‘Declaration of Cooperation’ (DoC) was its flexibility, grounded on the core principles of equity, fairness and transparency. Over the last two years, the partners have been able to modify course depending on conditions in the market. When the market appeared skewed to oversupply, we have reacted accordingly, and equally, when consumers expressed concerns regarding demand outpacing supply, the partners in the DoC have taken appropriate action.

“The rebound in oil price since last week may have shored up confidence in the 2019 Budget estimates which placed the oil price dependent revenue at $60/per barrel. During the presentation of the budget proposals to the National Assembly last month, President Mohammadu Buhari had stated:

“Notwithstanding the recent softening in international oil prices, the considered view of most reputable analysts is that the downward trend in oil prices in recent months is not necessarily reflective of the outlook for 2019. “However, as a responsible Administration, we will continue to monitor the situation and will respond to any changes in the international oil price outlook for 2019. With regard to oil production, I have directed the NPPC to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day,” he said.